IFC Injects Up to $300 Million to Stabilize Ghana's Cocoa Sector Amid Financial Challenges

The International Finance Corporation (IFC) has announced a significant intervention in Ghana's cocoa sector, pledging up to $300 million to address a critical financing gap affecting licensed buying companies (LBCs) and farmers. This move comes in response to delays in financing from the Ghana Cocoa Board (COCOBOD), which have forced LBCs to self-finance amidst challenging market conditions. IFC Senior Country Manager Kyle Kelhofer emphasized the importance of this funding to ensure liquidity in the cocoa supply chain, which is vital for maintaining competitive prices for farmers and the overall sustainability of the cocoa industry.

So far, the IFC has already committed over $100 million and is collaborating with local banks and government entities to stabilize the situation. Kelhofer noted that the IFC's support is crucial for sustaining operations in the cocoa sector, which faces production challenges and broader market pressures.

In addition to its cocoa sector initiatives, the IFC has highlighted the need for improvements in Ghana's credit infrastructure to enhance access to finance for small businesses. Kelhofer pointed out that weak credit systems, inefficient legal frameworks, and inadequate collateral registries are significant barriers to financing, rather than the availability of funds themselves. By addressing these foundational issues, the IFC aims to foster economic growth and support the private sector in Ghana.

Furthermore, Kelhofer clarified that the IFC's financial support does not contribute to Ghana's public debt, as its model focuses on financing private sector investments, which are repaid by the investors rather than the government. This distinction allows for more flexible and responsive investment opportunities, particularly in light of Ghana's recent economic reforms and improving stability.